Smaller companies should throw aside their cynicism about customer relationship management (CRM) and use it to gain competitive advantage on their bigger rivals, according to an industry analyst.

Gartner research vice president Ed Thompson said that mid-sized businesses are investing fast in CRM systems, and because they are smaller they will have fewer political battles to fight when installing systems.

"It's a lot about politics and change management. Less complexity means you can move quicker and gain competitive advantage against larger organisations," he said.

Speaking at the analyst group's Midsize Enterprise Summit in Dublin, Thompson said that while large organisations might take five to 10 years to get CRM working properly across the organisation, a smaller business might only need three years to get to the same level of maturity.

He pointed to examples of smaller companies getting benefits from CRM and said: "Cynicism is no longer appropriate." According to Gartner's research with end users, the technology is one of the easiest bits of a CRM deployment, with the hardest being the organisational restructuring that such a project can lead to, and the creation of customer-focused measurements.

Currently around 80 per cent of CRM systems are custom-developed, with the remaining 20 per cent being packaged applications from hundreds of different niche vendors, the research reveals.

But Thomson predicts rapid consolidation in the market because of the entrance of players such as Microsoft and the impact of the hosted model favoured by companies such as Salesforce.com. Open source is also beginning to have a modest impact, he added.

Silicon.com's Steve Ranger reported from London.